Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 1 of 23

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1 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 1 of 23 UNITED STATES DISTRlCT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA ex rei. KENNETH KARLIN, - against- Plaintiff, NOBLE JEWELRY HOLDINGS LIMITED, DA VID G. LLC formerly known as CHAD ALLISON DESIGNS, LLC, CHAD ALLISON CORPORATION, NOBLE JEWELRY LIMITED and JOHN DOES I 100, Defendants. UNITED STATES OF AMERICA, Plaintiff-Intervenor, STIPULATION AND ORDER OF SETTLEMENT AND DISMISSAL 08 Civ (JGK) USDC SONY DOCUMENT TRONICALLY FILED DOC# J I DATE FILED: 81,11,11) - against- NOBLE JEWELRY LTD, NOBLE JEWELRY LIMITED, and CHAD ALLISON CORPORATION, Defendants. WHEREAS, this Stipulation and Order of Settlement and Dismissal (the "Stipulation") is entered into by and among the United States of America, by its attorney Preet Bharara, United States Attorney for the Southern District of New York, and on behalf of the Department of Homeland Security ("DHS"), (collectively, the "Government"), Defendants Noble Jewelry Ltd. ("Noble Hong Kong"), Noble Jewelry Limited ("Noble Jewelry"), and Chad Allison Corporation ("Chad Allison") (collectively, "Defendants"), as well as Relator Kenneth Karlin (the "Relator") (hereafter collectively referred to as "the Parties"), through their authorized representatives;

2 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 2 of 23 WHEREAS, Noble Hong Kong is a corporation incorporated and operating principally in Hong Kong. Noble Hong Kong is a wholly owned subsidiary of a wholly owned subsidiary of Noble Jewelry Holdings Limited (the "Noble Holding Company"), which is a corporation incorporated in the Cayman Islands and operating principally in Hong Kong; WHEREAS, Noble Jewelry is a New York corporation, with its principal place of business in Manhattan. Noble Jewelry is a wholly owned subsidiary of a wholly owned subsidiary ofa wholly owned subsidiary of the Noble Holding Company; WHEREAS, Chad Allison is a Delaware corporation with its principal place of business in Manhattan, and is a successor to Chad Allison Designs LLC, a former Arizona limited liability corporation. Chad Allison is a wholly owned subsidiary of a wholly owned subsidiary of a wholly owned subsidiary of the Noble Holding Company; WHEREAS, Defendants have regularly imported jewelry into the United States from Hong Kong for commercial purposes, and have been required to pay appropriate customs duties on those goods; WHEREAS, on or about September 3,2008, Relator filed a qui tam action (the "Civil Action") in the United States District Court for the Southern District of New York (the "Court") pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. 3730(b) (the "Act"). In the Civil Action, Relator alleged that Defendants violated the Act "through a scheme to evade payment of U.S. customs duties," which involved the "fil ing of customs declaration and corresponding invoices which fraudulently understate[d] the transaction value of the goods being imported"; 2

3 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 3 of 23 WHEREAS, simultaneously with the filing of this stipulation, the Government has intervened in the Civil Action as against Defendants and filed a Complaint-in-Intervention of the United States of America (the "Federal Complaint"); WHEREAS, the Federal Complaint alleges that Defendants evaded customs duties during the period from 1998 through 2010 (the "Covered Period"), by presenting invoices to the Government that understated the value of the goods imported in order to avoid payment of customs duties. This conduct alleged in the Federal Complaint, and the same conduct alleged in the Relator's Complaint, shall be defined as the "Covered Conduct"; and WHEREAS, the Parties have reached a mutually agreeable resolution addressing Defendants' conduct through this Stipulation; NOW, THEREFORE, upon the Parties' agreement, IT IS HEREBY ORDERED that: TERMS AND CONDITIONS I. The Parties consent to this Court's exercise ofsubject matter jurisdiction over this action and personal jurisdiction over each of them. 2. Defendants hereby stipulate and acknowledge as true: a. that during the Covered Period Defendants repeatedly presented to the Government invoices for jewelry being imported into the United States that understated the value of the goods imported; b. that Defendants maintained, for their own commercial use, separate invoices, which accurately listed the value of the jewelry being imported; c. that Defendants shared the accurate invoices amongst themselves, by electronic mail or other private means; 3

4 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 4 of 23 d. that Defendants failed to disclose the accurate invoices and the values listed on those invoices to the Government; e. that, instead, Defendants disclosed only the understated invoices to the Government for use in the assessment ofcustoms duties; f. that, in order to avoid detection, Defendants packaged only the understated invoices with the jewelry being imported into the United States; g. that Defendants' use of understated invoices for the assessment ofcustoms duties led to the under-assessment of hundreds ofthousands of dollars in duties owed by Defendants to the Government; h. that, through their conduct, Defendants deprived the Government of hundreds of thousands of dollars ofcustoms duties; and i. that Defendants accept responsibility for the conduct acknowledged above, regret that conduct, and promise to act in good faith in their dealings with the Government going forward. 3. Defendants shall pay to the Government three million, eight hundred and fifty thousand dollars ($3,850,000) with interest on the unpaid balance accruing at the rate of 2% interest per annum, compounded annually and calculated daily, from the Effective Date (defined below) (the "Settlement Amount"). The Settlement Amount is to be discharged by an initial payment of five hundred thousand dollars ($500,000), (the "Initial Payment"), as set forth in subparagraph (a), and by subsequent installment payments as set forth in the schedule in subparagraph (b). a. Defendants shall make the Initial Payment as follows: 4

5 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 5 of 23 \. Defendants shall deliver to the Government a cashier's check in the amount of $20, paid to the order of VSE CorporationlDepartment of Treasury within five (5) business days of the Effective Date (defined below). ii. Defendants shall deliver to the Government a cashier's check in the amount of $3, paid to the order of Customs and Border Protection within five (5) business days of the Effective Date (defined below). iii. Defendants shall pay the Government the remaining $476, of the Initial Payment by electronic funds transfer pursuant to written instructions to be provided by the United States Attorney's Office for the Southern District of New York no later than ten business days after the Effective Date (defined below). b. Defendants shall make the subsequent installment payments to the Government by electronic funds transfer pursuant to written instructions to be provided by the United States Attorney's Office for the Southern District of New York on the following schedule and in the following amounts; provided, however, that Defendants shall at all times have the right to prepay the outstanding Settlement Amount, in whole or in part, without penalty but with interest through the date of the payment: Installment Payment Amount Installment Payment Due Date (on or before) $766, November 24, 2011 $1,026, May 24, 2012 $1,581, August 24, Subject to the exceptions in Paragraph 7 (concerning excluded claims) below, conditioned upon Defendants' full payment of the Settlement Amount, and subject to Paragraph 15 5

6 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 6 of 23 below (concerning bankruptcy proceedings commenced within 91 days of the Effective Date or any payment made under this Stipulation), the Government releases Defendants and all of their current and former officers, directors, employees, affiliates, and assigns from any civil or administrative monetary claim the United States has for the Covered Conduct under the False Claims Act, 31 U.S.C ; the Civil Monetary Penalties Law, 42 U.S.C. 1320a-7a; the Program Fraud Civil Remedies Act, 31 U.S.C ; and the common law theories of payment by mistake and unjust enrichment. 5. Subject to the exceptions in Paragraph 7 below, conditioned upon Defendants' full payment of the Settlement Amount, and subject to Paragraph 15 below (concerning bankruptcy proceedings commenced within 91 days of the Effective Date or any payment made under this Stipulation), Relator, for himself and for his heirs, successors, attorneys, agents, and assigns, re leases: (i) Defendants and all of their current and former officers, directors, employees, attorneys, agents, affiliates, and assigns from any claims the Relator has asserted, could have asserted, or may assert in the future for any acts or omissions that predated this Stipulation; and (ii) Defendants and all of their current and former officers, directors, employees, attorneys, agents, affiliates, and assigns from any claims the Relator has on behalf of the United States for the Covered Conduct under the False Claims Act, 31 U.S.C ; provided, however, that nothing in this Stipulation shall preclude Relator from seeking to recover his expenses or attorney's fees and costs from Defendants, pursuant to 31 U.S.C. 3730(d). 6. In consideration of the Relator's execution of this Stipulation and Relator's releases as set forth in Paragraph 5, Defendants and all of their current and former officers, directors, 6

7 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 7 of 23 employees, attorneys, agents, affiliates and assigns, on behalf of themselves and their heirs, attorneys, agents, successors, and assigns, release the Relator, his heirs, attorneys, agents, successors, and assigns, from any and all claims for any action, events, or conduct that predates this Stipulation. 7. Notwithstanding the releases given in Paragraphs 4 and 5 ofthis Stipulation, or any other term of this Stipulation, the following claims of the Government are specifically reserved and are not released by this Stipulation: a. Any liability arising under Title 26, U.S. Code (Internal Revenue Code); b. Any criminal liability; c. Except as explicitly stated in this Stipulation, any administrative liability, including under Title 19, U.S.C.; d. Any liability to the Government (or its agencies) for any conduct other than the Covered Conduct; and e. Any liability based upon obligations created by this Stipulation. 8. Defendants shall be in default ofthis Stipulation if they fail to make any payment set forth in Paragraph 3 by the due date stated therein ("Default"). The Government will provide written notice of the Default, to be sent by first-class mail to the undersigned attorney for Defendants. Defendants shall have an opportunity to cure the Default within seven (7) business days from date of receipt ofthe notice of Default. In the event that a Default is not fully cured within seven (7) business days of the receipt of notice of such Default (hereinafter, an "Uncured Default"), the Settlement Amount shall be immediately due and payable, and interest shall accrue at the rate of 9% per annum compounded annually on the remaining unpaid principal balance, beginning seven (7) business days after delivery 7

8 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 8 of 23 of the notice of Default. In the event ofan Uncured Default, Defendants agree to the entry ofa consent judgment in the fonn attached hereto as Exhibit A, and further, the United States, at its option, may: (a) rescind this Stipulation and reinstate the Federal Complaint; (b) seek specific performance of the Stipulation; (c) offset the remaining unpaid balance from any amounts due and owing Defendants by any department, agency or agent ofthe United States at the time of Default; or (d) exercise any other rights granted by law, or under the tenns of this Stipulation, or recognizable at common law or in equity. Defendants shall not contest any offset imposed or any collection action undertaken by the Government pursuant to this paragraph, either administratively or in any court. In addition, Defendants shall pay the Government all reasonable costs of collection and enforcement under this paragraph, including attorney's fees and expenses. In the event that the United States opts to rescind this StipUlation pursuant to this paragraph, Defendants shall not plead, argue or otherwise raise any defenses under the theories of statute of limitations, laches, estoppel or similar theories, to any civil or administrative claims which relate to the Covered Conduct, except to the extent those defenses were available on the Effective Date. 9. Relator and his heirs, successors, attorneys, agents, and assigns shall not object to this Stipulation but agree and confinn that this Stipulation is fair, adequate, and reasonable under all the circumstances, pursuant to 31 U.S.C. 3730( c )(2)(B). Subject to any claims Relator may have for his share of the Settlement Amount pursuant to the StipUlation and Order of Settlement and Release between the Relator and the United States, Relator, for himself individually, and for his heirs, successors, attorneys, agents, and assigns, fully and finally releases, waives, and forever discharges the United States, its officers, agents, and 8

9 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 9 of 23 employees, from any claims arising from the filing of the Civil Action and from any claims under 31 U.S.C Defendants waive and shall not assert any defenses Defendants may have to any criminal prosecution or administrative action relating to the Covered Conduct that may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment ofthe Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Stipulation bars a remedy sought in such criminal prosecution or administrative action. Nothing in this paragraph or any other provision of this Stipulation constitutes an agreement by the United States concerning the characterization of the U.S. Settlement Amount for purposes of the Internal Revenue laws, Title 26 of the United States Code. 11. Defendants fully and finally release the Government, and its agencies, employees, servants, and agents from any claims (including attorney's fees, costs, and expenses of every kind and however denominated) that Defendants have asserted, could have asserted, or may assert in the future against the Government, and its agencies, employees, servants, and agents, related to the Covered Conduct and the Government's investigation and prosecution thereof. 12. Defendants agree to the following: a. Unallowable Costs Defined: All costs (as defined in the Federal Acquisition Regulation, 48 C.F.R ) incurred by or on behalf of Defendants, and their present or former officers, directors, employees, shareholders, and agents in connection with: 1. the matters covered by this Stipulation; 9

10 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 10 of 23 ii. the Government's audit(s) and civil and/or criminal investigation(s) of the matters covered by this Stipulation; iii. Defendants' investigation, defense, and corrective actions undertaken in response to the Government's audit(s) and civil and/or criminal investigation(s) in connection with the matters covered by this Stipulation (including attorney's fees); IV. the negotiation and performance ofthis Stipulation; v. the payments Defendants make to the Government pursuant to this Stipulation and any payments that Defendants may make to Relator, including costs and attorneys fees, are unallowable costs for government contracting purposes (hereinafter referred to as Unallowable Costs). b. Future Treatment of Unallowable Costs: Unallowable Costs will be separately determined and accounted for by Defendants, and Defendants shall not charge such Unallowable Costs directly or indirectly to any contract with the Government. c. Treatment of Unallowable Costs Previously Submitted for Payment: Within 90 days of the Effective Date ofthis Stipulation, Defendants shall identify and repay by adjustment to future claims for payment or otherwise any Unallowable Costs included in payments previously sought by Defendants or any of their subsidiaries or affiliates from the Government. Defendants agree that the Government, at a minimum, shah be entitled to recoup from Defendants any overpayment plus applicable interest and penalties as a result of the inclusion of such Unallowable Costs on previously~submitted requests for payment. The United States, including 10

11 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 11 of 23 the Department of Justice and/or the affected agencies, reserves its rights to audit, examine, or re-examine Defendants' books and records and to disagree with any calculations submitted by Defendants or any of their subsidiaries or affiliates regarding any Unallowable Costs included in payments previously sought by Defendants, or the effect of any such Unallowable Costs on the amount of such payments. 13. Except as expressly provided to the contrary in this Stipulation, this Stipulation is intended to be for the benefit of the Parties only. The Parties do not release any claims against any other person or entity. 14. Defendants represent and warrant that they have reviewed their financial situation, that they currently are solvent within the meaning of 11 U.S.c. 547(b)(3) and 548(a)(I)(B)(ii)(I), and that they reasonably believe that they shall remain solvent following payment to the Government of the Settlement Amount. Further, the Parties warrant that, in evaluating whether to execute this Stipulation, they (a) have intended that the mutual promises, covenants, and obligations set forth constitute a contemporaneous exchange for new value given to Defendants, within the meaning of 11 U.S.C. 547(c)(l), and (b) conclude that these mutual promises, covenants, and obligations do, in fact, constitute such a contemporaneous exchange. Further, the Parties warrant that the mutual promises, covenants, and obligations set forth herein are intended to and do, in fact, represent a reasonably equivalent exchange of value that is not intended to hinder, delay, or defraud any entity to which Defendants were or became indebted to on or after the date of this transfer, within the meaning of 11 U.S.C. 548(a)(1). II

12 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 12 of If within 91 days of the Effective Date ofthis Stipulation or of any payment made under this Stipulation, Defendants commence, or a third party commences, any case, proceeding, or other action under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors (a) seeking to have any order for relief of Defendants' debts, or seeking to adjudicate Defendants as bankrupt or insolvent; or (b) seeking appointment of a receiver, trustee, custodian, or other similar official for Defendants or for all or any substantial part of Defendants' assets, Defendants agree as follows: a. Defendants' obligations under this Stipulation may not be avoided pursuant to 11 U.S.C. 547, and Defendants shall not argue or otherwise take the position in any such case, proceeding, or action that: (i) Defendants' obligations under this Stipulation may be avoided under 11 U.S.C. 547; (ii) Defendants were insolvent at the time this Stipulation was entered into; or (iii) the mutual promises, covenants, and obligations set forth in this Stipulation do not constitute a contemporaneous exchange for new value given to Defendants. b. If Defendants' obligations under this Stipulation are avoided for any reason, including, but not limited to, through the exercise of a trustee's avoidance powers under the Bankruptcy Code, the Government, at its sole option, may rescind the releases in this Stipulation and bring any civil and/or administrative claim, action, or proceeding against Defendants for the claims that would otherwise be covered by the releases provided in Paragraphs 4 and 5 above. Defendants agree that (i) any such claims, actions, or proceedings brought by the Government are not subject to an "automatic stay" pursuant to 11 U.S.C. 362(a) as a result of the action, case, or proceedings described in the first clause of this paragraph, and Defendants shall not 12

13 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 13 of 23 argue or otherwise contend that the Government's claims, actions, or proceedings are subject to an automatic stay; (ii) Defendants shall not plead, argue, or otherwise raise any defenses under the theories of statute of limitations, laches, estoppel, or similar theories, to any such civil or administrative claims, actions, or proceeding that are brought by the Government within 60 calendar days of written notification to Defendants that the releases have been rescinded pursuant to this paragraph, except to the extent such defenses were available on September 3, 2008, and (iii) the Government has a valid claim against Defendants in the amount of $3,850,000, and the Government may pursue its claim in the case, action, or proceeding referenced in the first clause of this paragraph, as well as in any other case, action, or proceeding. c. Defendants acknowledge that their agreements in this paragraph are provided in exchange for valuable consideration provided in this Stipulation. 16. Except as set forth in Paragraph 5 above (which, among other things, preserves Relator's ability to seek attorneys' fees), each Party shall bear its own and its employees' legal and other costs incurred in connection with this matter, including the preparation and performance of this Stipulation. 17. Any failure by the Government to insist upon the strict performance of any of the provisions ofthis Stipulation shall not be deemed a waiver of any of the provisions hereof, and the Government, notwithstanding that failure, shall have the right thereafter to insist upon strict performance of any and all of the provisions of this Stipulation. 18. This Stipulation is governed by the laws ofthe United States. The exclusive jurisdiction and venue for any dispute relating to this Stipulation is the United States District Court for the Southern District ofnew York. For purposes ofconstruing this StipUlation, this 13

14 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 14 of 23 Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not, therefore, be construed against any Party for that reason in any subsequent dispute. 19. Subject to the exceptions in Paragraph 7, and in consideration of the obligations of the Defendant in this Stipulation, conditioned upon and following Defendants' timely full payment of the Settlement Amount, the Government shall dismiss with prejudice the Federal Complaint and, subject to the Relator's right to seek to recover attorney's fees, costs and expenses from Defendants pursuant to 31 U.S.C. 3730(d), the Relator shall dismiss with prejudice the Civil Action; provided, however, that the Court shall retain jurisdiction over this Stipulation and each Party to the extent the obligations herein remain unsatisfied by that Party. 20. This Stipulation constitutes the complete agreement between the Parties. This Stipulation may not be amended except by written consent of the Parties. 21. The undersigned counsel and other signatories represent and warrant that they are fully authorized to execute this Stipulation on behalf of the persons and entities indicated below. 22. This Stipulation may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same Stipulation. Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this Stipulation. 23. Any notices pursuant to this Stipulation shall be in writing and shall, unless expressly provided otherwise herein, be given by hand delivery, express courier, or facsimile transmission followed by postage-prepaid mail, and shall be addressed as follows: 14

15 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 15 of 23 IF TO THE UNITED STATES: Brian M. Feldman Heidi Wendel Assistant United States Attorneys United States Attorney's Office Southern District of New York 86 Chambers Street, 3rd Floor New York, NY Facsimile: (212) IF TO DEFENDANTS: Jeffrey A. Udell Olshan Grundman Frome Rosenzweig & Wolosky LLP Park Avenue Tower 65 East 55th Street New York, New York Facsimile No. (212) IF TO RELATOR: Mark A. Strauss Kirby McInerney LLP 825 Third Avenue New York, New York Facsimile No. (212) The effective date of this Stipulation is the date upon which this Stipulation is entered by this Court (the "Effective Date"). 15

16 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 16 of 23 Agreed to by: THE UNITED STATES OF AMERICA New York, New York August'l.~, 2011 Attorneysfor Plaintiff-Intervenor United States ofamerica PREET BHARARA United States Attorney for the Southern District ofnew York r;y:~~ BRIAN M. FELDMAN Assistant United States Attorney 86 Chambers Street, 3rd floor New York, New York Telephone No. (212) Facsimile No. (212) Brian.F DEFENDANTS New York, New York August _,2011 Attorneysfor Defendants OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP S'o ~,~ t[l~ (j; I <b,7) ;-:>. ~/if?/ JEFFREY A. UDELL Park Avenue Tower 65 East 55th Street New York, New York Telephone No. (212) Facsimile No. (212) judell@olshanlaw.com 16

17 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 17 of 23 Agreed to by: THE UNITED STATES OF AMERICA New York, New York August _,2011 A liorneysfor Plaintijj:Jnlervenor United Slates ofamerica PREET BHARARA United States Atton~ey for the Southern District of New York BRIAN M. FELDMAN Assistant United States Attorney 86 Chambers Street, 3rd floor New York, New Yark Telephone No. (212) Facsimile No. (212) Brian.Feldman@usdoj.gov DEFENOANTS New Yock, New York Allorneysfor Defendanls August J4, OI.~HAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP By S1 j}~djjmi/li1-1$pl~ ALJUDELL {J Park A venue Tower 65 East 55th Street New York, New York Telephone No. (212) Facsimile No. (212) judell@olshanlaw.com 16

18 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 18 of 23 Hong Kmlg AugtlS[ ~.!. 20 I I..:::E;.a~L-~i~::J(.11S.L_...._.. Title: F"\""~1"".l (( "1:.".t-IJ",, DUlcci: New 'lork. Nt'w York August.)r{.. 20 II Tille. Daled New York. New 'y',.,,, i\\lgllsi2.~. :;(1 II By fille: RH.ATOR [J.lted: };cw York. N",,\ Yurk Augusl, 20 II Dllle'd: Ne\\ )\nk, New York AU);"t!); ! I KARLIN IiIIm7rt:y.,!nr N"illlar KIRBY MCINERNEY LLP MARK A STRAUSS 8~5 Hlird Avenue N\.~w York, New York lekphnne Nt). (2 l2) ] 71 (1600 Far.:';Ii11de No. (212) 751 :?54() lll:itrauss(!i)kmjjp.com 17

19 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 19 of 23 Hong Kong August _, 2011 Defendant NoMe Jewelry Ltd. Title: New York, New York August _' 2011 Defendant NoMe Jewelry Limited Title: New York, New York August _,2011 Defendant Chud Allison Corporation Title: RELATOR New York, New York August _,2011 New York, New York August _._' 20) 1 Al10rneysfhr Relator KIRBY MCINERNEY LLP MARK A STRAUSS 825 Third A venue New York, New York Telephone No. (212) Facsimile No. (212) mstrauss@kmllp.com

20 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 20 of 23 Hong Kong August _, 2011 Defendant Noble Jewelty Ltd. Title: New York, New York August --' 201 I Defendant Noble Jewelry Limited Title: New York, New Yark August _, 2011 Defendant Chad Allison Corporation Title: New York, New York August _,2011 RELATOR Relator KENNETH KARLIN New York, New York August ~ ), 2011 A ttorneys for Relator KIRBY MCINERl~EY LLP 2 ~"."."/""~.. '""" "~"/'l. ""'-"~ - t-t-v'''_:21~,?t:,::;;'- - ;I /.. ~~1 up;,~~ MARK A STRAUSS 825 Third Avenue New York, New York Telephone No. (212) Facsimile No. (212) mstrauss@kmllp.com 17

21 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 21 of 23 SO ORDERED: THE HONORABLE JOHN G. KOEL TL United States District Judge 18

22 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 22 of 23 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA ex rei, KENNETH KARLIN, - against Plaintiff, NOBLE JEWELRY HOLDINGS LIMITED, DA VID G, LLC formerly known as CHAD ALLISON DESIGNS, LLC, CHAD ALLISON CORPORATION, NOBLE JEWELRY LIMITED and JOHN DOES 1 100, ECF Case CONSENT JUDGMENT 08 Civ (JGK) Judgment No. Defendants, UNITED STATES OF AMERICA, - against- Plaintiff-Intervenor, NOBLE JEWELRY LTD" NOBLE JEWELRY LIMITED, and CHAD ALLISON CORPORATION, Defendants. Upon the consent of plaintiff-intervenor the United States of America and defendants Noble Jewelry Ltd., Noble Jewelry Limited, and Chad Allison Corporation, following entry of a stipulation and order of settlement; it is hereby ORDERED, ADJUDGED AND DECREED: That plaintiff-intervenor the United States of America is awarded judgment in the sum of $3,850,000 as of August 24, 2011, as against defendants Noble Jewelry Ltd., Noble Jewelry Limited, and Chad Allison Corporation, jointly and severally, plus any and all applicable pre-judgment and post-judgment interest as permitted by law.

23 Case 1:08-cv JGK-KNF Document 19 Filed 08/29/11 Page 23 of 23 Consented to by: Attorneysfor Plaintifflntervenor United States ofamerica PREET BHARARA United States Attorney for the Southern District of New York :?~E3= BY:d~'" BRIAN M. FELDMAN Assistant United States Attorney 86 Chambers Street, 3rd floor New York, New York Telephone No. (212) Facsimile No. (212) Attorneys for Defendants OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP J L' P~rk Avenue Tower 65 East 55th Street New York, New York Telephone No. (212) Facsimile No. (212) judell@olshanlaw.com.new York, New York OJJ O uxt-?1,201l Clerk of Court So Ordered: United States District Judge Deputy Clerk